Viewing a single comment thread. View all comments

luaks1337 t1_iznzb5z wrote

Reply to comment by [deleted] in [OC] Inflation heatmap for 44 European, other DM and EM countries by adebar

That's not the reason for why their inflation is so low. Switzerland has backed 95% of the Swiss Franc with Gold reserves. When the Swiss Franc inflates they just trade the Gold for their own currency and buy it off of the global markets. The result is a decreased supply of Swiss Francs in foreign markets. Scarce supply means an increase in value therefore counteracting inflation.

I believe the ECB (and most other countries) have backed their currency by less than 10% which makes it much harder to counter steer inflation.

21

[deleted] t1_izo3f3j wrote

[deleted]

−23

luaks1337 t1_izoegst wrote

Listen buddy if you want to discuss whether lock down strategies make sense or not you can do that but in the case of Switzerland the by far most relevant factor is the excellent backing of the Swiss Franc.

18